Sheraton Grand Sukhumvit Hotel, Bangkok

Apologies:

1. Bayani Lauraya, JFCCT Taxation Committee

2. Simon Matthews, JFCCT Employment Committee Chairman

3. Belu – Thai Chamber of Commerce

4. Thai – Chinese Chamber of Commerce

5. Danish – Thai Chamber of Commerce

6. India – Thai Chamber of Commerce

7. Irish – Thai Chamber of Commerce

8. Netherlands – Thai Chamber of Commerce

9. Polish – Thai Business Club

Mr. Arto Artinian, President of Armenian – Thai Chamber of Commerce welcomed all participants, and invited everyone for a video presentation about Armenia then introduced Board members of the Armenian – Thai Chamber of Commerce namely, Mr. Sarkis Tarakjian, Vice President, Mr. Levon Abrahamian, Executive Director and Mr. Paris Barouyer Kouyoumdjian, Public Relation of the Armenian – Thai Chamber of Commerce before passing the chair to Mr. Nandor von der Luehe, JFCCT Chairman.The meeting then turned to its agenda.

Agenda Item I            Approval of the Minutes of the Presidents’ Council Meeting held on Friday, 14 May 2010

The Chairman asked the meeting to review the minutes of the previous meeting.  There were no changes to the minutes, and the minutes were approved.

Agenda Item II        Update from Committees

The Chairman invited all committee chairs to provide an update.

• ICT

Mr Bob Fox, chairman of the ICT Committee, provided an update in two parts.  The previous ICT meeting was 27 April 2010; next ICT meeting 16 June, there was no in-person May meeting due to the difficulty of local travel in Bangkok.

There has been a frenzy of last minute activity, due to stated concerns about the duration of the government’s term, then on the eve of a cabinet reshuffle:

• The Senate made a number of changes to the Frequency legislation, which is the basis for moving forward in the industry.
• The third 3G information memorandum has been released, with an intended short time frame for spectrum issuance.
• There is a new ICT Minister, a Democrat. The new Deputy Finance Minister is a former ICT minister
• The odd semi-baked plan that we can skip 3G after all and move directly to something called ‘3.9G’.
• The long-standing acting president of SIPA was appointed president.

1. Telecoms

The ICT committee had previously noted the strategic importance of ICT sectors and that Thailand was moving behind, relatively.  This condition is exacerbated by current political events, and disappointingly now there appears to be more of the same.

Change of the kind needed required political will. Thailand is almost unique in the world in failing to evolve its SOEs in this sector. In their present state they could not possibly effectively support the kind of telecomms sector which the Thai economy needs.

Thailand needs to restore investor confidence. There is also a need for reconciliation. What does this mean in a business context?  As a recent article in the Bangkok Post noted, this means to try to put vested interests behind us, and to allow for greater and wider participation in the economy. In a telecoms context, this would mean planting the national flag firmly on the industry as a whole – to make it innovative, efficient and attractive (thus allowing greater participation and enriching the economy), rather than planting the flag on SOEs and continuing to protect them from evolving and reforming.

Some mixed news is the release of plans for issuance of 3G spectrum, but this (third) version appears to have more baggage than the second (late 2009).

At previous meetings (eg March 2009) we have tabled explanations about the importance of doing concession conversion first as without such conversion the structure becomes very messy and difficult to work.

In late 2009 on balance with a then more attractive set of 3G rules, we said reform is essential but we did not believe the 3G issuance should be held up. That has changed due to the cumbersome and unattractive terms of this third set of 3G rules, and also a better prospect of effecting conversion first, and more widely held understanding of why such reform is needed. After nine years of deferrals and the effect of the voice of vested interests of various kinds, now with the need to restore investor confidence and with a cabinet showing the prospect of greater cohesiveness, the planets might just be aligned.

Thus we plan that our proposition be that we strongly recommend embarking on the first major reform step first (concession conversion) before issuance of 3G spectrum.

We have prepared a draft submission by way of a Memo (with covering letters to each of their Excellencies the Prime Minister, the ICT Minister, and the Finance Minister) which will be reviewed at this week’s ICT meeting on 16 June. This submission would follow the same format as (and make many of the same comments and recommendations as) our submission in February 2009.  We propose taking a firm line about recommending concession reform prior to issuance of 3G. We will continue to question why the State Owned Enterprises are not provided with the direction to reform and find roles (eg in wholesale broadband) best suited to them (as HE the Prime Minister said at the JFCCT lunch in February 2009) rather than getting into 3G. We also propose a letter to the NTC specifically focused on the third 3G Information Memorandum, or proposed 3G terms.

There is currently no apparent use of additional means to limit foreign participation other than the FBA standard (which we have previously said we agree with), but there are discussions on foreign dominance and we will need to see what additional points are proposed.

It is currently proposed that only three licences would be awarded.

The Frequency legislation had already cleared the House (with a much improved terms since our submission in February 2009) and has now been released by the Senate committee, with some new terms, including:

• A three year (instead of one) moratorium on the commencement of reduced use of concession revenues by the State Owned Enterprises.
• Number of NBTC commissioners increased

The ICT meeting will review this at its 16 June meeting and include recommendations in the submission already discussed.

In an ASEAN context, it does not appear that Thailand is preparing for the liberalisations contemplated by AFAS (eg 51% foreign ownership in all service sectors by 2010). Thailand continues to slip (relatively) on almost all network readiness / knowledge economy rankings.

The ICT committee had provided an update on Thailand for the EU Commissioner on Information Society and Media, and the ICT committee planned to do so again mid 2010.

2. Software / Creative Economy

A new Office of National Creative Economy, which we understand to be under the Office of Prime Minister instead of Commerce.

We reported at the last meeting on our dialogue with BOI, and will be preparing some proposals about incentives which follow up previous proposals. We have noted that some measures such as tax incentives (although most welcome) do not always resonate with all investors and do not reflect the real requirements which will make a difference. This is more due to where BOI sits than lack of will to make the changes.

SIPA appeared to have turned to a more locally-focused agenda. The ICT committee had maintained a dialogue with the SIPA chairman which would continue.

The ICT committee would welcome more details on any changes proposed in the foreign employment legislation.

Mr Fox noted that the ICT committee’s model encouraged two way communication between the representatives on the committee and the chambers they represented: to provide updates and get guidance, and also to provide issues relevant to the chambers. He said that with their continued participation and the support of the Presidents and the chambers for this two way communication, we could continue to build consensus on all relevant issues.

The chairman invited questions.

In response to a question on recent press about Thaicom (formerly called ShinSat), Mr Fox noted that this could be viewed in part at least as a political issue due to the concerns about the use of a Thaicom satellite to broadcast some red shirt messages. On the business front, Thaicom was not currently profitable and there were concerns about the efficacy of some of its satellites, eg Thaicom 4 or IPSTAR, a massive communications satellite which was nowhere near capacity. There was also the view that the company should be nationalised, or repatriated due to what were said to be national security issues, although there were different views about this. 

·               Law

Mr. Ben Yong, chairman of Law Committee provided an update as following.

Committee members raised various issues of interest, including:-

·         Regional Operating Headquarters – Cabinet has approved changes to ROH scheme. Revenue Department is drafting the regulations to implement the changes. Government plans to add trading activities to ROH activities by August 2010.

·         Bill to impose land tax and inheritance tax on property still a Bill.

·         Ministry of Commerce considering changes to allow board meetings by telephone conference.

The Law Committee chair was asked whether the committee could provide information on relevant pending legislation and its likely and actual progress so that any submissions could be made in a timely way. This was agreed to.

·               Customs

Mr. Dennis Grover, chairman of Customs Committee updated the meeting as follows.

The committee has met K Somchai the DG of Customs Department and discussed on a progress of the Amend Customs Law, the DG said that he will make the law to be modernized.

The meeting was informed that the Board of Trade proposed an amendment to Excise Tax on Tobacco, a draft of amendment has been proposed to Minister of Finance.

·               Property

Mr. Patima Jeerapaet, chairman of Property Committee provided an update as follows.

The Property Committee had representatives from the Land Department – Tayvee Kanokjote, Suchart Dokmaipang and Suparat Deesiruk attended the committee meeting.

The status of the white paper on leasehold extension is still waiting to hear the results from the Council of State.

This matter will be discussed at the next meeting when the committee has a meeting with Mr. Atip Bijanonda, President of the Thai Condominium Association.

·               Employment

Mr. Simon Matthews, chairman of JFCCT Employment Committee could not attend the meeting he sent a brief update as followings.

• Khun Paitoon has been replaced as Minister of Labor at the recent cabinet reshuffle
• The changes to the Foreign employment act with regards to job titles that foreigners can work as is on hold at present
• Have a meeting at the Ministry of Labor week beginning the 21^st of June

·               Taxation

Mr. Bayani Lauraya, Chairman of Taxation Committee could not attend the meeting.  The chairman said that the Taxation Committee has sent a letter under JFCCT to propose tax measures to the Prime Minister to help investors after the demonstration.

·                Tourism

Mr. Jean Marc Garret, Chairman of Tourism Committee provided an update as follows.

He proposed a meeting with all appointed Chair Committees in order to propose a meeting with the Ministry of Tourism in view to make proposal and hear the  Ministry decision to boost Tourism. The issue is to present the Chair committees and take this opportunity to open dialogue on recommendations and to assist.

Agenda Item III        Prime Minister meets Investors on 18 June 2010

The chairman informed the meeting that JFCCT Chamber/ Embassy Golf Tournament will be postponed since the BOI has organized a Prime Minister meets Investors on 18 June 2010 at Muangthong Thani Chaengwattana.

The chairman said that this will be an opportunity to raise issues to the Prime Minister regarding

• Foreign Business Act which was mentioned by Deputy Minister of Commerce, Alongkorn Pollabutr at the meeting with foreign investors that list 3 will be more flexible to re-built confidence in Thailand.

• That BOI should be moved back to Prime Minister Office.

The meeting suggested JFCCT to submit a paper to Prime Minister and inform BOI and MOC.

Agenda Item IV       Chamber/Embassy Golf Tournament, Friday, 25 June

Mr. Maurice Bromley, President of South African – Thai Chamber of Commerce updated that JFCCT Chamber/Embassy Golf Tournament will take place on 25 June at Thana City Golf Course.  He requested chambers to send their teams and handicap to JFCCT as soon as possible.  He thanked Board of Trade for sending a team to join this event.  He requested all Chambers thier donation for this event either in cash or in kind.

Agenda V                Meeting with Public Sector Anti-Corruption Commission (PACC)

The chairman informed that meeting with PACC has been postponed to 29 June 2010 at Centara Sofitel Ladprao from 8.30 – 13.00 hrs.

If members of Foreign Chambers of Commerce are interested to attend the meeting they should send a confirmation directly to PACC office per an invitation which has been circulated earlier.

Agenda VI               Thailand’s Investment Looking Forward 2010

The chairman informed the meeting of Thailand’s Investment Environment: Looking Forward 2010 which is an annual event joint organized by JSCCIB and JFCCT. The seminar will take place on 15 July 2010 at Mahisorn Convention Center, Siam Commercial Bank, Ratchayothin Road.

The chairman requested all chambers to encourage their chambers members to respond to the questionnaire that has been circulated to 5 companies of each chamber, the results will be presented at the seminar.

The chairman encouraged all chambers to join the event an invitation will be sent out to all chambers soon.

Agenda Item VII       Cooperation with the Board of Trade

·                                Thaifex-World of Food Asia 2010 will be organized on 30 June – 4 July 2010 at Challenger Hall 2-3 Impact, Muangthong Thani.  All Presidents of Foreign Chambers of Commerce will be invited to join an opening ceremony.  An invitation card will be sent to all Presidents.

·                JFCCT chairman, Mr. Nandor von der Luehe has been appointed as the chairman of Anti-Corruption Committee of the Board of Trade and K. Kobkarn Wattanavrangkul of Toshiba Thailand Co., Ltd. is a secretary of  the committee.                   

Agenda Item VIII        Other Business

There was some discussion about communication of each committee’s work and roles.

A proposal was made that a short summary be prepared by each committee chair and circulated ahead of the meeting. It was also noted that the representatives on each committee are in may cases volunteers; their expertise and continued involvement was important, if they felt that they were being bypassed, they might lose interest and not participate, thus a balance was needed so that participation continued and also information flowed.

It was agreed that the Presidents would be provided with minutes of all committee meetings, and the chairman would discuss with the committee chairs the idea of a summary.

The meeting adjourned at 14.00 pm.